KOSPI Ends Flat... Foreign Investors' Last-Minute Comeback

KOSPI and KOSDAQ Close Higher
Despite Weak Economic Indicators,
Foreign Investors' Late Buying Pushes Gains

Photo by Getty Images Bank

[Asia Economy Reporter Hwang Junho] On the 1st, the stock market showed mixed trends as economic indicators from South Korea and neighboring countries were released one after another, eventually closing flat.

On that day, the KOSPI closed at 2,452.25, up 0.75 points (0.03%) from the previous session. The KOSPI fluctuated throughout the day but ended slightly higher due to net buying by foreign investors before the market closed. Foreign investors made net purchases worth 86.7 billion KRW, and individuals bought stocks worth 60 billion KRW. On the other hand, institutions sold stocks worth 145.7 billion KRW.

Among all listed stocks, 490 showed gains. Following the perennial leader Samsung Electronics (-0.11%), LG Energy Solution (-0.58%), and SK Hynix (-0.82%), the top three KOSPI market cap stocks all recorded declines.

Expectations for LG Chem's New Drug, Samsung SDI Undervalued

Conversely, Samsung SDI (2.46%), LG Chem (1.66%), and Samsung Biologics (1.50%) rose more than 1%. Among them, LG Chem attracted attention early in the session by announcing that it had applied to the U.S. Food and Drug Administration (FDA) for a Phase 3 clinical trial plan for its self-developed gout drug, Tigulixostat. LG Chem plans to obtain FDA approval as a first-line treatment by 2027 and begin global sales in 2028. However, LG Chem's stock price gradually declined in the afternoon.

In the case of Samsung SDI, the view that it is undervalued gained prominence after SK On, the battery subsidiary of SK Innovation, reported second-quarter sales and operating losses of 1.288 trillion KRW and 326.6 billion KRW, respectively. Samsung SDI achieved second-quarter sales of 4.7408 trillion KRW and operating profit of 429 billion KRW this year. NH Investment & Securities also released a stock report on the day, setting a target price of 1 million KRW for Samsung SDI, citing expectations for improved profitability and new customer acquisition.

By industry, the textile and apparel sector and the non-metallic minerals sector rose more than 1%. Among them, the textile and apparel sector rose 4.02% due to gains in stocks such as Seongan (29.97%) and F&F (7.02%).

Significant Gains in KOSDAQ Leaders Including EcoPro BM

The KOSDAQ also showed fluctuating movements on the day. It closed at 807.61, up 0.50% from the previous day. Foreign investors switched to net buying in the afternoon, with net purchases totaling 24.6 billion KRW. Meanwhile, individuals and institutions sold stocks worth 12.7 billion KRW and 10.7 billion KRW, respectively.

Among the top market cap stocks, EcoPro BM (6.95%), L&F (4.94%), Chunbo (3.01%), and EcoPro (2.80%) showed significant gains. By sector, electrical and electronics (3.94%), metals (2.04%), and IT components (1.94%) were strong.

On the day, the KRW/USD exchange rate rose to 1,307 won due to continued Korean trade deficits, pressure on the won's weakness, and offshore yuan weakness despite the dollar's weakness, before closing at 1,304.00 won, up 0.38% from the previous session.

Lee Kyung-min, a researcher at Daishin Securities, analyzed, "With foreign and institutional investors both net selling, the market fluctuated narrowly around the 2,450 level. The July manufacturing PMI of China's National Bureau of Statistics (49) entering contraction territory, the Caixin manufacturing PMI (50.4) falling short of the expected 51.5, and concerns over China's real estate market were identified as negative factors dampening overall Asian investor sentiment." However, he added, "The Chinese stock market mostly recovered its intraday losses and reversed to gains, and Japan (Nikkei 0.55%) and Australia (ASX 0.64%) also maintained solid upward trends."

Kim Seok-hwan, a researcher at Mirae Asset Securities, stated, "The KOSPI narrowed its losses following weakness, foreign investors' shift to buying, and the Chinese stock market's rebound." He added, "Strong performance in secondary battery materials stocks, expectations for the passage of the U.S. electric vehicle bill, export growth, and solid earnings led to gains in EcoPro BM, L&F, and others."